The Importance Of Housing And The Mortgage System In Spain

Spain's mortgages systemSpain's housing market

There is a lot of talk about the need to put a priority, above all, on maintaining the characteristics, in terms of depth and stability, of Spain’s mortgage system. It’s not an excuse from the financial institutions in response to the legal disputes and legal insecurity which the sector is facing.

It’s merely that it’s crucial all this doesn’t imply a threat for the mortgage system and the stability of the financial sector itself. It’s said our mortgage system, which is one of the cheapest and with the best financing conditions in Europe, has allowed more than 80% of families to own their own home. And let’s put this figure into perspective, taking into account the importance a home means for Spaniards, over and above the investment which becomes the principal economic/financial decision of their lives.

So what’s my point with all this? Well, in the last few days the National Statistics Institute (INE) has published two very interesting figures. On the one hand, an update of the weighting of the components which make up the basket for calculating CPI. And on the other, today we have seen the figure for last December and for the whole of 2016 for housing tranmissions…

In the first case, note that housing costs represent a 6.4% increase in the weightings of the shopping basket, now accounting for 13.3% of the total. I know that doesn’t include the cost of interest payments on the mortgage, but it does include running costs, conservation and rental prices. With regard to the transmission of property rights, 122,851 homes were registered last December, a decrease of 1.1% on the previous year. But in annual terms, it’s a rise of 2.6%.

Last December, 83.6 % of the housing transactions registered were for urban properties, with a 5.6% rise for the month and a 11.4% increase for the whole year. If we talk of houses, 57.3% of the total properties registered, the rise was 6.8% in December and 13.6% for the year as a whole.

So once again, all these figures show how important housing is for the Spanish society from a variety of viewpoints. And thus strengthen the initial arguments.